Genesis and Gemini Discussed Merger Before Bankruptcy Filing

Crypto News- Lawyers representing Digital Currency Group (DCG) and its CEO Barry Silbert recently unveiled a compelling piece of evidence hinting at discussions between DCG and the crypto exchange Gemini regarding a potential merger. The revelation comes amid ongoing legal battles involving DCG subsidiary Genesis.

In a court filing dated March 6, attorneys shared an email exchange between Silbert and other DCG executives outlining the highlights of a lunch meeting Silbert had with Cameron Winklevoss, co-founder of Gemini, on October 20, 2022.

Genesis and Gemini Discussed Merger Before Bankruptcy Filing

Silbert’s email portrayed Winklevoss as intrigued by the notion of a closer partnership between Genesis, Gemini, and DCG, including the possibility of merging their respective companies. Silbert candidly warned Winklevoss about the risk of Genesis facing bankruptcy and the potential impact on Gemini’s deposits and business.

Despite the dire warning, Winklevoss seemed receptive, acknowledging the need for collaborative efforts to mitigate risks. Silbert pitched the idea of combining forces with Gemini as a means to rival major players like Coinbase and FTX, proposing to raise substantial funds for a future public offering.

One enticing proposition involved transferring assets from DCG subsidiary Grayscale Investments to Gemini, potentially establishing it as the largest crypto custody provider globally.

The tone of the email indicated Silbert’s efforts to dissuade Winklevoss from severing ties with Genesis, expressing concerns about liquidity and the possibility of a bank run should Gemini end its partnership with Genesis.

However, despite the discussions and potential benefits outlined, a merger between the two entities never materialized. Following FTX’s sudden collapse the following month, Genesis halted withdrawals due to what it termed as “unprecedented market turmoil.”

Subsequently, Gemini filed a lawsuit against Genesis last October, seeking to recover $1.6 billion in Grayscale Bitcoin Trust assets.

The email exchange sheds light on the complex dynamics within the crypto industry and the strategic maneuvers undertaken by key players amidst market uncertainties and legal disputes.